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All rank-and-file employees who have worked for at least one (1)
month during the calendar year, are entitled to receive 13th month
pay regardless of the nature of their employment and irrespective of
the methods by which their wages are paid.
How is 13th month pay computed?
The 13th month pay shall not be less than 1/12 of the total basic
salary earned by an employee within a calendar year. To illustrate:
Total basic salary earned for the year = proportionate 13th month
pay
12 months
When should the 13th month pay be paid?
Yes. An employee who has resigned or whose services were terminated at any
time before the time for payment of 13th month is still entitled to the benefit.
Thus, if he/she worked only from January to September, his/her 13th month pay
shall be equal to 1/12 of his total basic salary earned during that period
Is 13th month pay taxable?
Pursuant to Republic Act 10653, the 13th month pay and other
benefits, including productivity incentives and Christmas bonuses,
not exceeding P82,000 provided to both government and private
sector employees are exempted from tax.
Your 13th month pay may not be equivalent to your monthly basic
salary.
According to the law, your basic salary should only be earnings or
primary payment paid to an employee for services rendered. On the
other hand, basic salary does not include:
If Juan has any absences or lates during the month, the pay
equivalent of those should be deducted from basic salary first
before determining the 13th month pay.
You can actually view how much you stand to redeem your 13th month
pay on your payslip.
Depending on how the payment has been set up, the 13th month
redeemable is taken from 1/12th of your monthly basic pay worked. The
figure from the previous month is them added to next month’s
redeemable, and the next month and so on.
On the second payslip, the redeemable is then added to the
computed redeemable for the second month, as shown here: